Manufacturing Firing Up the Engines Again

Manufacturers are feeling sunnier, according to a new Price Waterhouse Coopers poll. The poll, which queried senior executives at 60 industrial manufacturers between mid-July and mid-October, found that 48 percent sense optimism about the American market compared with last year an improvement over the second quarter.  In light of this cautious optimism, 23 percent expect their businesses to regain strength before June, although another 45 percent believe their businesses will not improve until the second half of 2010.

In the same vein, a report from the Institute for Supply Management (ISM) indicated increases in several of its manufacturing indices, which suggest that industrial property owners might soon see a demand for space.  During the same timeframe, the Department of Commerce reported a one percent increase in bookings for durable goods during September.  This represented the first increase in the GDP since the second quarter of 2008.

A significant finding is that the number of companies anticipating growth in revenue over the next year recorded an even larger increase compared with the second quarter, with 57 percent responding positively in the third quarter.  Only 25 percent plan to hire new employees in the next year, and 37 percent plan to make capital investments.

ISM notes that October is the third consecutive month of manufacturing growth.  The most promising change reported by ISM is a surge in the production index, which rose 7.6 points to 63.3 percent during the third quarter.